DETROIT -- Another solid quarterly performance at General Motors brought the strongest talk yet of the automaker paying a dividend for the first time in five years, or perhaps buying back stock.
GM on Wednesday reported pretax profit of $2.64 billion for the third quarter, up almost 15 percent over a year ago. Earnings grew in North America, South America and China and losses narrowed in Europe.
Chairman and CEO Dan Akerson said on a conference call that the board knows that shareholders want the best possible return on their investment. "We understand what we're here for, and one of them is to return money to our shareholders," he said, without giving a specific time frame.
GM eliminated its common stock dividend in July 2008, as the company's finances deteriorated. It filed for bankruptcy protection in 2009.
Crosstown rival Ford Motor Co. also stopped paying a dividend five years ago. But Ford resumed the payout in 2012, and doubled it to 10 cents in this year's first quarter. That makes Ford stock more attractive than GM to many investors.
GM's strong third-quarter performance was masked a bit by $900 million worth of one-time items that brought net income down 53 percent from a year ago. Net income totaled $698 million, or 45 cents per share. That compares with $1.48 billion, or 89 cents per share, a year ago. Without one-time items and after paying taxes, GM earned $1.7 billion, or 96 cents per share. Analysts polled by FactSet expected 94 cents per share.
GM has now been profitable for 15 straight quarters.
Revenue rose 4 percent to $39 billion, just short of Wall Street's estimate of $39.2 billion.
Investors viewed the results favorably. GM shares rose $1.20, or 3.3 percent, to $37.26 in afternoon trading.
GM's performance in North America was especially strong, with pretax earnings up 28 percent to $2.2 billion on solid pickup truck sales and better pricing. GM rolled out updated versions of its Chevrolet Silverado and GMC Sierra pickups in the spring.
Major drug tunnel found: A sophisticated border tunnel was discovered connecting San Diego and Tijuana, Mexico, U.S. authorities said Wednesday, the latest find by investigators who have encountered a number of secret passages in recent years used for drug smuggling. The passage was recently completed, U.S. Immigration and Customs Enforcement said in a brief statement. A spokesman, Lauren Mack, declined to specify what it had been used for. Mexican news organizations published photos that show a deep, well-built tunnel near Tijuana's main airport. Alberto Capella, Tijuana's public safety chief, said Wednesday night that a law enforcement operation was underway and he couldn't provide details.
Budget deficit lowest in 5 years: For the first time in five years, the U.S. government has run a budget deficit below $1 trillion. The government said the deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012. That's the smallest imbalance since 2008, when the government ran a $458.6 billion deficit. The deficit is the gap between the government's tax revenue and its spending. It narrowed for the budget year that ended on Sept. 30 because revenue rose while spending fell. Revenue jumped 13.3 percent to $2.77 trillion, reflecting a slightly better economy and higher tax rates. And government spending declined 2.4 percent to $3.45 trillion, in part because of across-the-board spending cuts that took effect in March.
Low interest-rate policies unchanged: The Federal Reserve said its low interest-rate policies are still needed to invigorate a subpar U.S. economy. In a statement Wednesday after a policy meeting, the Fed said it would keep buying $85 billion a month in bonds to keep long-term rates low and encourage borrowing and spending. Yet the Fed seemed to signal that it thinks the economy is improving despite some recent weak data and uncertainties caused by the partial government shutdown. The Fed no longer expresses concern, as it did in September, that higher mortgage rates could hold back hiring and economic growth. And its statement makes no reference to the 16-day shutdown, which economists say has slowed growth this quarter.
Benefits to go up by 1.5 percent: Social Security benefits will rise 1.5 percent in January, giving millions of retired and disabled workers an average raise of $19 a month to keep up with the cost of living. The increase is among the smallest since automatic adjustments were adopted in 1975, and reflects the fact that consumer prices haven't gone up much in the past year. The annual cost-of-living adjustment, or COLA, is based on a government measure of inflation that was released Wednesday.
Chrysler IPO could happen soon: On the heels of a profitable third quarter, Chrysler Group said it will proceed with a public offering of shares before the end of this year. Italy's Fiat SpA owns the majority of Chrysler shares. Sergio Marchionne, who runs both companies, wants to combine them by purchasing the 41.5 percent of Chrysler now controlled by a United Auto Workers-run trust. The two sides disagree on the value of the trust's shares, and on a conference call Wednesday, the CEO said the two sides still haven't reached a deal.
Gas leak forces evacuation: A geyser of gasoline spewed into the sky from a state-owned pipeline in western Mexico, forcing officials to evacuate about 5,000 people Wednesday. Authorities blamed the accident on fuel thieves tapping into the pipe. Gasoline plumed above a field close to a housing development in Tlajomulco, a town near Guadalajara, which is Mexico's second-largest city and the capital of Jalisco state. The fuel did not catch fire, and crews were able to shut down the flow of gasoline in the pipeline, which was leaking about 150 yards from some homes. There were no reports of injuries.